Reaction of the dianion (5) derived from an acylaminomalonic ester with S-(-)-MOM lactate (6) yields β-hydroxylactams 7 and 8 in a 2:1 ratio. Deprotection and lactonization of 7, followed by saponification and 2 step carboxyl reduction efficiently produces the fused bicyclic lactam-lactone 12, a chiral model of the antitumor antibiotic neooxazolomycm 1.